Abstract

REPORT HIGHLIGHTS

Global sales from compound semiconductor components totaled nearly $25.5
billion in 2011 and should surpass $27 billion in 2012. Total sales are
expected to reach nearly $47.5 billion in 2017 after increasing at a five-year
compound annual growth rate (CAGR) of 11.9%.

The Americas are expected to have sales worth nearly $5.2 billion in 2012 and
$8.8 billion in 2017, a CAGR of 11.4%.

EMEA should have sales totaling nearly $8.5 billion in 2012 and nearly $16.4
billion in 2017, a CAGR of 14%.

REPORT SCOPE

INTRODUCTION

Compound semiconductors have captured the attention of researchers,
semiconductor device makers, and original equipment manufacturers (OEMs) for
several years on account of their superior physical and chemical attributes in
relation to silicon, the mainstream semiconductor material. The greatest
value that they bring to the table is that of variety and customization. It
is not surprising that compound semiconductors are the prime ingredients of
some of the most complex semiconductor components ever synthesized.

On the flip side, the variety of compounds works unfavorably in terms of scale
and consequent pricing. Considering that these materials are pitted against
silicon, the most widely available material with the most refined and
cost-efficient fabrication process, there is a real danger of the competition
being rendered lop-sided in favor of silicon.

However, it is not entirely accurate to compare and confine compound
semiconductors to the benchmarks set by silicon. Compound semiconductors have
a distinct character of their own and they spawn several use-cases of
application that can be catered to only by them. This report is an attempt to
capture the value added by compound semiconductors to the larger semiconductor
component industry. The value is assessed at two levels in the component
manufacturing process: the material stage and the component stage. The
report assesses the value of compound semiconductor material sold to component
manufacturers as well as the value of the components manufactured by these
companies. The focus of the report is on the component, which has a perfect
balance in the unitary nature of its composition and the diverse nature of its
application.

Breaking down the global compound semiconductor component market along the
following individual components in value and volume terms: lasers and optical
components; LEDs; radio frequency (RF) front end and power amplifier chipsets;
and solar/ photovoltaic (PV) panels and cells.

Breaking down the market for individual compound semiconductor components
along the following end applications in value and volume terms:
telecommunications; instrumentation and scientific research; medicine; energy,
defense, and surveillance; computing and entertainment; industrial and
automotive; retail; and others.

Breaking down the market for individual compound semiconductor components
along the following regions in value and volume terms: the Americas; Europe,
Middle East, and Africa (EMEA); and Asia Pacific (APAC).

Breaking down the market for individual compound semiconductor components
along the following compound semiconductor families in value and volume terms:
binary II-VI, binary III-V, binary IV-IV, and others.

Breaking down the market for compound semiconductor materials used in
individual compound semiconductor components along the following compound
semiconductor families in value terms: binary II-VI, binary III-V, binary
IV-IV, and others.

REASONS FOR DOING THE STUDY

Compound semiconductors provide a welcome departure from the cut-throat
cost-competitive scheme of silicon fabrication. It will not be out of place
to mention that the bulk of innovation on the process and device front is
driven by compound semiconductors and that they occupy a disproportionately
large share of this activity. It is undisputable that compound semiconductors
win hands down in terms of physical and chemical attributes over silicon. It
is equally clear that silicon will continue to enjoy a substantial competitive
advantage in terms of operating scale and availability for the foreseeable
future.

This report aims to provide a quantitative point of view with regard to the
tightrope traversed by compound semiconductors. The report tries to bring out
the quantitative contribution of compound semiconductors to the components
driven by them, in terms of plain bill of materials (BoMs). At the same time,
the report examines the value added by compound semiconductors in qualitative
terms.

Essentially, the report focuses on components, which can be easily quantified
and whose physical attributes can be compared, contrasted, tracked and
analyzed.

Each component has its own dynamics, benefits and challenges with respect to
levels of adoption of compound semiconductors. On a larger note, each
component has its own market momentum dictated by the health of the
end-application verticals as well as relevant macroeconomic factors. When
these aspects are mapped for individual countries, they produce a fascinating
collage of local market conditions that add to the larger picture. This
report provides a granular view of individual country markets in volume and
value terms for 17 key nations spanning all global regions. There are several
variables to be considered: preferred compounds, cost benefits of competing
compounds, entry-level barriers, level of fragmentation, state of innovation,
and attitude of governments in terms of support, as well as future avenues for
market expansion. This report attempts to look at all of these factors and
quantify their impact on the state of the demand for compound semiconductors
and their components.

SCOPE OF THE REPORT

The report measures and forecasts the size of the market in current U.S.
dollars as well as in millions of shipment units for components that contain
compound semiconductors as primary parts. This report also measures and
forecasts dollar sales of compound semiconductor materials from 2012 through
2017.

The report forecasts the market size for the following:

Individual compound semiconductor components such as lasers and optical
components; LEDs; RF power amplifier and front-end chipsets; and solar/PV
cells and panels. It should be noted that in solar panel shipments one square
meter of the panel is considered to be a unit. It also should be noted that
the component market sizes in this report do not reflect the total market for
such components, but only those portions that contain compound semiconductors
as primary parts.

The above forecasts are classified in terms of vertical end applications,
geographical regions, compound semiconductor families, and countries on volume
and value bases; in terms of value chain contributors on a value basis; and in
terms of individual key compound semiconductors on a value basis.

Additionally, the report forecasts the sales of compound semiconductor
family materials for each of the individual compound semiconductor components.

The Executive Summary provides a snapshot of key findings of the report.

The chapter on theory of compound semiconductors highlights important
technology concepts behind compound semiconductors. It also introduces the
reader to the various categories and types of compound semiconductor materials
and components, as well as manufacturing and fabrication technologies.

The chapter on global markets for compound semiconductor components provides a
thorough breakdown of the market for compound semiconductor materials and
components. The breakdown focuses on the components that employ compound
semiconductors as primary parts. This chapter also provides a comprehensive,
quantitative view of the compound semiconductor material and component market.

The chapter on regional analysis for the Americas presents an overview of the
region and the overall market metrics, followed by analyses of individual
major countries such as the U.S., Brazil, Canada and Mexico.

The chapter on regional analysis for EMEA presents an overview of the region
and the overall market metrics, followed by analyses of individual major
countries such as Germany, France, U.K., Spain, Italy, Russia, the Netherlands
and Turkey.

The chapter on regional analysis for APAC presents an overview of the region
and the overall market metrics, followed by analyses of individual major
countries such as China, Japan, India, South Korea and Indonesia.

The chapter on stakeholders highlights stakeholder categories and analyzes the
activities in this domain. It also clarifies where and how stakeholders fit
in the larger picture.

The U.S. Patent Analysis chapter highlights the patenting activity underway in
the area of compound semiconductor components. The chapter classifies the
patents awarded according to categories such as LEDs, lasers and optical
components, solar panels, and RF power amplifier and front-end chipsets.

INTENDED AUDIENCE

This report will be relevant to the following audiences:

Laser and optical component makers in order to analyze the market
prospects for their offerings broken down by compound semiconductor families,
individual compound semiconductor end applications, geographical regions, and
key country markets.

LED makers in order to analyze the market prospects for their offerings
broken down by compound semiconductor families, individual compound
semiconductor end applications, geographical regions, and key country markets.

RF power amplifier and front end makers in order to analyze the market
prospects for their offerings broken down by compound semiconductor families,
individual compound semiconductor end applications, geographical regions, and
key country markets.

Solar/PV panel and cell makers in order to analyze the market prospects
for their offerings broken down by compound semiconductor families, individual
compound semiconductor end applications, geographical regions, and key country
markets.

Compound semiconductor material suppliers in order to identify the
potential of their output across leading component industries in the
semiconductor domain.

Original equipment manufacturers and other integrators to analyze the
prospects of the compound semiconductor components employed by them in their
devices, equipment and products

METHODOLOGY AND INFORMATION SOURCES

Both primary and secondary research methodologies were used in this study.
Industry experts were interviewed as primary sources; secondary sources
included industry consortia, individual company financial statements,
published opinions, and other published sources including technical
dissertations.

ABOUT THE AUTHOR

Kaustubha Parkhi has worked in a broad range of functional roles with leading
telecommunications operators and service providers such as Reliance Infocomm,
Ramco Systems, and BPL Cellular. He has written on an array of
telecommunications and electronics-related subjects based on his critical
analysis of the underlying technology and its business impact. Kaustubha
holds a Bachelor of Engineering (equivalent to a Bachelor of Science) in
Electronics and Telecommunications and a Master of Business Administration in
Systems.